July 7, 2023
Written by John Korsmo, President
American Church Group of Colorado
Imagine the unthinkable happening—a devastating tornado or wildfire tearing through your city, leaving destruction in its wake. Now picture receiving a call in the middle of the night informing you that your facility has been hit, and it's likely a total loss. In such a moment, would you breathe easy, knowing you have adequate insurance coverage, or would worry consume you? The current state of the insurance market, plagued by unprecedented inflation, has raised concerns about the adequacy of coverage. Fortunately, we have an affordable solution that can provide you with peace of mind.
Inflation's Impact on Insurance:
In recent times, inflation has had a profound effect on the insurance industry as a whole. Major carriers, such as Nationwide and State Farm, have taken significant action to address this issue nationwide. These companies have been working to enhance both the rate and coverage structure of their policies in various states. To stabilize their existing portfolios, they have also made the decision to reduce new business applications.
Colorado's Struggles with Wildfires:
Among the states hit hardest by the factors driving inflation, Colorado stands out. According to insurancenews.net, the state witnessed three of the most devastating wildfires in its history, scorching a staggering 578,000 acres. This was followed by the 2021 Marshall Fire, which caused $513 million in damages in less than six hours. The Great Plains and Rockies, where our agency group operates, are particularly prone to large hail, wind, and fire exposures. Consequently, the costs associated with rebuilding facilities have skyrocketed.
Addressing Rising Costs:
To put it simply, the rising costs of materials and labor necessitate a reevaluation of insurance coverage. For instance, a church that may have been adequately insured for $5 million just three years ago would now require coverage closer to $7.5 million to account for these escalating costs. Unfortunately, accurately predicting building values in the face of double-digit inflation since the onset of the COVID-19 pandemic is no easy task.
To ensure your coverage keeps pace with the rising costs, our agency group, along with Brotherhood Mutual, utilizes market-leading services and predictive modeling. However, it's essential to recognize that even with these efforts, it's not a perfect science given the unprecedented inflationary environment. Stephanie Abrell, Director of Client Experience for our agency group, emphasizes the importance of considering broadened valuation for our clients. This coverage option can pay up to 125% of a building's coverage limit after a loss, offering an additional buffer for unexpected costs.
Affordable and Beneficial:
One might assume that adding an extra 25% of coverage would come at a substantial cost. However, Abrell assures our clients that the premium for broadened valuation is highly affordable. The peace of mind it brings in knowing that you have an added safety net in the face of rising costs far outweighs the minimal additional expense.
To learn more about broadened valuation and how it can protect your assets, we encourage you to reach out to our dedicated service team or contact your agent. Our knowledgeable professionals are ready to provide you with all the information you need to make informed decisions about your insurance coverage.
If you would like more information on broadened valuation (either to add it or to verify if you currently have it), contact our service team by emailing email@example.com or by calling your agent.
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